THE TIPSTER
WITH the yen hitting a nine-year high against the euro, people have wondered if it can go any further. But coupled with poor economic data continuing to come out of Europe, the trend is likely to continue. Cantor Index offers a euro-yen spread of ¥106.70-¥106.72.
The single currency continues to lose ground as risk appetite diminishes and traders keep piling into safe havens. There are now some key technical levels coming into play – $1.2600 being the 50 per cent retracement of the June-August move higher – there are few buyers for the euro out there. The current IG Index price for euro-dollar is $1.2609-$1.2611.
Concerns may have subsided over credit risks in the peripheral Eurozone states over the summer, but they are starting to rear their heads once more. As a result, despite some sound macro economic data out of Germany and suggestions by the Bank of England’s Martin Weale that the UK is eyeing a second recession, euro-sterling continues to wind its way lower. Although we still sit some way above the late June lows of £0.8067, the longer term trend is clearly established as downward. The current IG Index price for euro-sterling is £0.8183-£0.8185.
The yen continues to gain against the pound. There is not much in the way of technical support through ¥127, so if the Japanese finance ministry continues to talk down its currency rather than directly intervene, we may well see further gains in the yen. Spread Co offers a spread on sterling-yen of ¥129.26-¥129.34.
The Swiss franc could strengthen against the dollar to SFr.0259. Spreadex has a spot dollar-Swiss franc spread of SFr1.0308-SFr1.0314.
The political uncertainty in Australia has helped fuel Aussie weakness. It is now close to two-month lows against the yen. A break below key support around ¥73.60 could well open up further yen gains towards ¥72.00. CMC Markets’ spread on Aussie-yen is ¥74.21-¥74.25.